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ARCHIVED - Nuclear Liability and Compensation Act

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Background

The introduction of legislative proposals to replace the 1976 Nuclear Liability Act follows through on the Government of Canada’s commitment to modernize this important area of nuclear legislation. The proposed legislation will increase the amount of compensation available to address civil nuclear damage from $75 million to $1 billion; broaden the number of categories for which compensation may be sought; and improve the procedures for delivering compensation.

Purpose

The 1976 Nuclear Liability Act establishes a compensation and civil liability regime to address damages resulting from a nuclear accident. It applies to Canadian nuclear facilities such as nuclear power plants, nuclear research reactors, fuel processing plants and facilities for managing used nuclear fuel.

Absolute and Exclusive Liability

The legislation would maintain the key principle of “absolute liability,” — this makes the operator of the nuclear facility responsible for civil injury and damage. It means that victims do not need to prove fault to make claims for injury or damages. Another important principle of the legislation is “exclusive liability of the operator,” which means that the operator alone is liable, to the exclusion of others such as suppliers and contractors. These important principles will be retained in the new legislation.

Overview of the Proposed Legislation

The new legislation will improve the claims compensation process for victims, increase the financial liability of nuclear operators for damages and provide greater certainty for the nuclear industry.

Liability Amount and Required Financial Security

The monetary limit in the Act for operator liability would be increased over a three-year time frame to $1 billion (from $75 million under the 1976 Nuclear Liability Act). The new liability amount is commensurate with current international standards. Operators will be permitted to guarantee their financial liability with traditional insurance and other forms of financial security. The government will provide coverage for certain risks for which there is no liability insurance; it will also provide increased coverage for lower-risk nuclear facilities, such as small research reactors at universities, through an arrangement with approved insurers.

Other Improvements

The proposed legislation will include other significant improvements. The legislation will contain expanded definitions of compensable damage to include economic loss, preventive measures and environmental damage. It will contain a longer limitation period for submitting compensation claims for bodily injury (30 years versus the current 10 years) to address latent illnesses — such as certain forms of cancer detected more than 10 years after an incident. The 10-year period would be maintained for all other forms of damage. The proposed legislation will elaborate the features of a quasi-judicial claims tribunal to be established to replace regular courts if necessary, to accelerate claims payments and provide an efficient and equitable forum.

Convention on Supplementary Compensation for Nuclear Damage

The new legislation will also implement the provisions of the International Atomic Energy Agency’s Convention on Supplementary Compensation for Nuclear Damage and allow Canada to become a Party to the Convention. This Convention is an international instrument to address nuclear civil liability in the event of a nuclear incident resulting in transboundary damage.

Joining the Convention would bolster Canada’s nuclear civil liability regime by financially supplementing Canada’s domestic regime and by clarifying liability and compensation rules for transboundary and transportation incidents. Of the existing international nuclear liability conventions, the Convention on Supplementary Compensation for Nuclear Damage is the most attractive for Canada as it would establish nuclear civil liability treaty relations with the U.S., which is already a party.

The Convention is not yet in force. It will come into force once it has been ratified by at least five countries with an installed nuclear capacity of 400,000 megawatts thermal. If Canada becomes a Party, it would take only one other country, such as Japan or South Korea, to join for the Convention to come into force.

The Government of Canada expects to table the proposed legislation in Parliament in the fall of 2013. More details will be available when the legislation is tabled.